What is a Builders Lien?
Builders Lien definition in layman terms: A builders lien is typically used if you are having difficulty getting paid. When you file a builders lien you are registering a legal interest against the property you have done work on. You are showing you have a financial interest in the project, for monies owed for the work you have done. In layman terms, if you have provided work and-or materials to a job site that help to improve the land, you can file a Builders Lien.
Liens must be filed within a specific time period, which varies in each province. Also, some provinces the term builders liens can also refer to or be known as construction liens and mechanics liens. In Ontario builders liens are known as Construction Liens. In New Brunswick, Nova Scotia, PEI, Newfoundland, Yukon, Northwest Territories and Nunavut, builders liens are called Mechanics Liens. Only in British Columbia, Alberta, Saskatchewan and Manitoba are builders liens called a Builders Lien.
Each province and territory has a time limit deadline for filing a Builders Lien
For example, in Alberta there is a strict 45 day rule for filing a Builders' Lien. The 45 day deadline you have to file a Builders' Lien begins after your last day on site providing materials, services, labour, etc. or from the date the contract was completed. The lien deadline can also begin from the date the project was abandoned.There is no way to extend this deadline when filing a builders lien.
Another example is a Saskatchewan Builders Lien, where the lien deadline begins as soon as substantial completion is issued on a project. In Saskatchewan, from the date of substantial completion, you have 40 days to file a Builders' Lien. In Saskatchewan for example, if you have completed work on a project and substantial completion has not been issued, technically your lien deadline has not yet started. This technicality allows you to actually have a longer lien filing period than the 40 days when filing Saskatchewan Builders Liens.
Builders Liens ensure you have an interest on the property you are doing work for. When a Builders' Lien is placed it is registered against the land title and can delay the release of funds or the sale-refinancing of the property. Filing a builders lien forces a delinquent customer to address the situation head on and gets you to the negotiating table. The lien will not be removed until an agreement has been met or it expires.
Builders Liens are a great collection tool
The presence of a lien means that further payment will be delayed to the entire project and the property won't be able to be sold or refinanced. For example, if you are a sub-contractor doing electrical work on a house, you can file a lien against the company, or builder, who hired you and the lien attaches itself to the property.
Whether you are still working on site or have been off site recently, make sure you receive payment prior to your lien rights expiring. You are unable to renew or extend your deadline once your lien rights expire on your builders lien.
Returning to a job site for deficiency work or work that should have been completed earlier does not extend the filing deadline on builders liens.